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Massive hike in SA petrol price expected next month

| Economic factors

The Automobile Association (AA) says that motorists can expect an increase in the petrol price of around 39 cents a litre in June, driven by both the weak rand and stronger international oil prices.

The AA was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF).

“Motorists have been fortunate in 2016 so far, with lower oil prices buffering the country from the weaker rand,” the association said.

“However, oil has now strengthened while the rand continues to decline, with both contributing to the current under-recovery picture.”

The mid-month data shows petrol set for an increase of around 39 cents a litre, with stronger oil accounting for around 23 cents of the rise, and the weaker rand contributing 16 cents, the AA said.

This would put the retail price of 93 octane petrol in Gauteng at R12.83 per litre.

Diesel is expected to rise as much as 61 cent per litre, while illuminating paraffin is showing a 44 cents a litre increase, the association said.

The wholesale price of diesel with 0,05% sulphur in Gauteng would cost about R11.14 per litre.

“Our concern over the rand’s short-term trajectory is growing; since the start of May, it has depreciated from around R14.20 to the US dollar to its current level of R15.80. If oil continues to firm, rand weakness is set to have a severe impact on fuel users,” the AA said.

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